Husband’s Claim That Properties Bought in Second Wife’s Name With His Money Were Benami Can Proceed to Trial, Madras HC Says

The first respondent/plaintiff sued the petitioner, his second wife, and other defendants, claiming that three properties purchased in the petitioner’s name were funded by his earnings and were held for his benefit.

He sought a declaration of title, injunction, and invalidation of a settlement deed concerning two properties.

The petitioner applied under Order VII Rule 11 CPC to reject the plaint, contending that the claims were barred by the Benami Transactions (Prohibition) Act, 1988.

The trial court dismissed the application, reasoning that the issue required evidence; the petitioner challenged that decision.

The High Court treated the petition as one under Section 115 CPC.

Under Order VII Rule 11 CPC, rejection of a plaint must be determined by examining its averments; the court considered whether those averments attracted the prohibition under Section 3(1) and the bar under Section 4(1) of the Benami Transactions (Prohibition) Act, 1988.

The plaintiff relied on the statutory exception concerning property purchased in a wife’s name, while the petitioner disputed its application; the court treated whether the purchase was for the wife’s benefit as a factual question to be assessed on the pleadings and, where necessary, evidence.

The cited decisions—including Nand Kishore Mehra v. Sushila Mehra, Mangathai Ammal v. Rajeswari and Shanthi v. M. Masanam—were distinguished as cases decided after evidence was considered.

The court also held that G.S. Balasubramaniam v. Rathinam @ Rathinammal could not be applied without regard to its facts and evidentiary context.

Although the plaint referred to money being sent out of “love and affection,” it also alleged that the properties were purchased for the plaintiff’s benefit and were intended for his possession and enjoyment.

Reading the plaint as a whole, the Court found it could not conclusively determine at the rejection stage whether the properties were purchased for the petitioner’s benefit or fell within the pleaded exception.

The issue therefore required evidence, and the cited decisions did not establish that the plaint was barred on its face.

It left the merits to be decided after evidence, directed the Additional District Court, Kallakurichi, to dispose of the suit within six months of receiving the order, and clarified that the observations made at the interlocutory stage would not affect the trial court’s determination.

No costs were ordered; the connected CMP was also dismissed.